Outgoing Valeant Pharmaceuticals (VRX.TO) Chief Executive Michael Pearson plans to tell a U.S. Senate panel on Wednesday that he regrets his decision to acquire and jack up the price of two life-saving heart drugs, saying it was all a “mistake.”
“The company was too aggressive- and I, as its leader, was too aggressive – in pursuing price increases on certain drugs,” Pearson said in prepared testimony before the Senate Special Committee on Aging.
The Senate committee is one of two U.S. congressional panels investigating the sky-rocketing price increases of certain decades-old drugs made by companies including Valeant and Turing Pharmaceuticals, a company founded by Martin Shkreli.
Pearson will appear on Wednesday alongside Valeant’s activist investor and board member William Ackman, and board member Howard Schiller, where they are expected to be peppered with questions of the company’s business and pricing practices.
Pearson’s latest comments strikes a conciliatory tone compared with his comments last October, when he wrote a letter to the Senate panel’s top Democrat to defend the company’s acquisition of the heart drugs from Marathon Pharmaceuticals in 2015.
After that acquisition, Valeant increased the price of Isuprel by about 720 percent. It also increased the price of Nitropress several times, ultimately raising it to $880.88 from a starting price of $214.83.
“In hindsight I regret pursuing, transactions where a central premise was a planned increase in the prices of the medicines,” Pearson said in the testimony.
“We should have abandoned the transaction with Marathon when it became clear that the expected arrival of generic competition made the economics of the deal dependent on significant price increases,” he said.
Valeant is facing investigations by U.S. prosecutors into its drugs pricing. It is also under fire for accounting problems in connection with its prior business relationship with specialty pharmacy Philidor RX Services.
Last month, it appointed Ackman to the board, delayed filing its annual report and disclosed it needs to restate its earnings.
Pearson is expected to step down in the next few weeks to make way for the incoming CEO, Joseph Papa, previously of Perrigo Company (PRGO.N).
In his testimony, Pearson said he expects Papa will “no longer be seeking to acquire mispriced drugs.”